MONTREAL, QUEBEC--(Marketwire - Feb. 25, 2013) - Stornoway Diamond Corporation (TSX:SWY) is pleased to report that it has completed diamond recovery from the Renard 65 bulk sample recently collected at Stornoway's 100% owned Renard Diamond Project located in north-central Quebec. In total, 962.8 carats of diamonds larger than a +1 DTC size sieve were recovered from 5080.8 dry tonnes. The size of the diamond sample recovered and the incidene of large diamonds are consistent with Stornoway's expectations for the Renard 65 kimberlite at this sample location.
The objective of the Renard 65 bulk sample was the collection of approximately 1,000 carats of Renard 65 diamonds for valuation purposes. Having achieved this objective, a diamond valuation exercise has been scheduled to take place shortly in Antwerp, Belgium.
As previously announced (Stornoway press release dated December 11th 2012) the largest diamond recovered from the sample was a 9.78 carat white octahedral gem with a preliminary valuation of $7,000 per carat. The next largest diamond was a 6.41 carat white gem also of high quality, with a preliminary valuation of $4,700 per carat.
The Renard 65 bulk sampling is being undertaken with a view to the potential conversion of material that is currently classified as an Inferred Mineral Resource to an Indicated Mineral Resource and, if warranted, to a Mineral Reserve for inclusion in the project's mine plan. Within the larger Renard Mineral Resource inventory, Renard 65 contains an Inferred Mineral Resource of 3.7 million carats (representing 12.9 million tonnes at an average grade of 29 carats per hundred tonnes) to a depth of 290m, with an exploration potential estimated at between 6.8 and 13.7 million carats (29.5 to 41.6 million tonnes at between 23 and 33 cpht) from 290m to 775m in depth. The reader is cautioned that mineral resources that are not mineral reserves do not have demonstrated economic viability. In addition, the potential quantity and grade of any exploration target is conceptual in nature, and it is uncertain if further exploration will result in it being delineated as a mineral resource.
The current bulk sample was extracted from a site that is known to represent a lower grade portion of the kimberlite, but which is easily accessible from surface. In 2008, a 266 tonne trench sample from the same location returned 51.8 carats for a diamond recovery of 19 cpht, identical to the current result.
Large Diamonds in Exploration Samples at Renard
A feature of the Renard Diamond Project has been the incidence of large, high value stones that have been recovered at each stage of exploration sampling since the project's discovery in 2001. The current Renard 65 bulk sample has continued this trend. In 2003 a white octahedral gem of at least 4 carats was discovered embedded in drill core at Renard 65. During the Renard bulk sampling program of 2007 a 15.46 carat top light brown "makeable" gem was recovered from Renard 2, a 10.15 carat white octahedral gem was recovered from Renard 3, and a broken 21.53 carat brown octahedral gem was recovered from the Lynx Dyke in three pieces of 11.73, 5.96 and 3.94 carats. In all, at least seven large stones have now been recovered from Renard with values in excess of US$4,000 per carat.
Scientific and Technical Data
Diamond results reported in this release are based on dense media separation (DMS) processing work completed by Stornoway at its wholly owned and operated 10 tonne per hour (tph) DMS plant situated in northern Quebec. Kimberlite was prepared through a primary jaw crusher, with -50 mm material fed directly into the DMS which is configured to recover stones retained on a 1.0 x 12.0mm slotted screen. Recovery of +1 DTC diamonds from the DMS concentrate was carried out at Stornoway's wholly owned diamond laboratory in North Vancouver whereby concentrates were processed through x-ray sorter equipment with a grease table finish to generate a final concentrate which was hand sorted to extract diamonds. Quality assurance protocols, security and actual operating procedures for the processing, transport and recovery of diamonds conform to industry standard Chain of Custody provisions. As part of Stornoway's ongoing QA/QC program, all aspects of the bulk sample program are subject to audit. Any material changes to the recovered diamond contents provided above will be reported when available.
Mr. David Skelton, P.Geo. (QC), P.Geol (AB), Vice President, Project Development for Stornoway is a Qualified Person as defined under National Instrument ("NI") 43-101 and was responsible for supervising the Renard 65 bulk sample program on the Renard Diamond Project. Mr. Robin Hopkins, P.Geol. (NT/NU), Vice President, Exploration for Stornoway is a Qualified Person as defined under NI 43-101 and was responsible for supervising the diamond recovery. Messrs. Skelton and Hopkins have reviewed and approved the scientific and technical information contained in this release. Diamond valuations were performed by Mr. Shlomo Tidhar of Galaxy Diamond Expertise (HK), a consultant to Stornoway.
About the Renard Diamond Project
The Renard Diamond Project is located approximately 250 km north of the Cree community of Mistissini and 350 km north of Chibougamau in the James Bay region of north-central Québec. In November 2011, Stornoway released the results of a Feasibility Study at Renard, followed by an Optimization Study in January 2013, which highlighted the potential of the project to become a significant producer of high value rough diamonds over a long mine life. Probable Mineral Reserves as defined under NI 43-101 stand at 17.9 million carats, with a further 17.5 million carats classified as Inferred Mineral Resources, and 23.5 to 48.5 million carats classified as non-resource exploration upside. All kimberlites remain open at depth. Pre-production capital cost stands at an estimated C$752 million, with a life of mine operating cost of C$57.63/tonne giving a 67% operating margin over an initial 11 year mine life. Readers are referred to the technical report dated December 29, 2011 in respect of the November 2011 Feasibility Study for the Renard Diamond Project, and the press release dated 28th January 2013 in respect to the January 2013 Optimization Study, for further details and assumptions relating to the project.
About Stornoway Diamond Corporation
Stornoway is a leading Canadian diamond exploration and development company listed on the Toronto Stock Exchange under the symbol SWY and headquartered in Montreal. Our flagship asset is the 100% owned Renard Diamond Project, on track to becoming Québec's first diamond mine. Stornoway also maintains an active diamond exploration program with both advanced and grassroots programs in the most prospective regions of Canada. Stornoway is a growth oriented company with a world class asset, in one of the world's best mining jurisdictions, in one of the world's great mining businesses.
On behalf of the Board
STORNOWAY DIAMOND CORPORATION
Matt Manson, President and Chief Executive Officer
This press release contains "forward-looking information" within the meaning of Canadian securities legislation and "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995. This information and these statements, referred to herein as "forward-looking statements", are made as of the date of this press release and the Company does not intend, and does not assume any obligation, to update these forward-looking statements, except as required by law.
Forward-looking statements relate to future events or future performance and reflect current expectations or beliefs regarding future events and include, but are not limited to, statements with respect to: (i) the amount of mineral resources and exploration targets; (ii) the amount of future production over any period; (iii) net present value and internal rates of return of the mining operation; (iv) assumptions relating to recovered grade, average ore recovery, internal dilution, mining dilution and other mining parameters set out in the Feasibility Study or the Optimization Study; (v) assumptions relating to gross revenues, operating cash flow and other revenue metrics set out in the Feasibility Study or the Optimization Study; (vi) mine expansion potential and expected mine life; (vii) expected time frames for completion of permitting and regulatory approvals and making a production decision; (viii) the expected time frames for the construction of a mining grade road by Stornoway and completion generally of the Route 167 extension and the financial obligations or costs incurred by Stornoway in connection with such road extension; (ix) future exploration plans; (x) future market prices for rough diamonds; and (xi) sources of and anticipated financing requirements. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, using words or phrases such as "expects", "anticipates", "plans", "projects", "estimates", "assumes", "intends", "strategy", "goals", "objectives" or variations thereof or stating that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved, or the negative of any of these terms and similar expressions) are not statements of historical fact and may be forward-looking statements.
Forward-looking statements are made based upon certain assumptions by Stornoway or its consultants and other important factors that, if untrue, could cause the actual results, performances or achievements of Stornoway to be materially different from future results, performances or achievements expressed or implied by such statements. Such statements and information are based on numerous assumptions regarding present and future business strategies and the environment in which Stornoway will operate in the future, including the price of diamonds, anticipated costs and Stornoway's ability to achieve its goals. Certain important factors that could cause actual results, performances or achievements to differ materially from those in the forward-looking statements include, but are not limited to: (i) estimated approval date of the Environmental and Social Impact Assessment; (ii) required capital investment and estimated workforce requirements; (iii) estimates of net present value and internal rates of return; (iv) receipt of regulatory approvals on acceptable terms within commonly experienced time frames; (v) the assumption that a production decision will be made, and that decision will be positive; (vi) anticipated timelines for the commencement of mine production; (vii) anticipated timelines related to the construction of a mining grade road by Stornoway and completion generally of the Route 167 extension and the impact on the development schedule at Renard; (viii) anticipated timelines for community consultations and the impact of those consultations on the regulatory approval process; (ix) market prices for rough diamonds and the potential impact on the Renard Project's value; and (x) future exploration plans and objectives.
By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, and risks exist that estimates, forecasts, projections and other forward-looking statements will not be achieved or that assumptions do not reflect future experience. We caution readers not to place undue reliance on these forward-looking statements as a number of important risk factors could cause the actual outcomes to differ materially from the beliefs, plans, objectives, expectations, anticipations, estimates, assumptions and intentions expressed in such forward-looking statements. These risk factors may be generally stated as the risk that the assumptions and estimates expressed above do not occur, including the assumption in many forward-looking statements that other forward-looking statements will be correct, but specifically include, without limitation, (i) risks relating to variations in the grade, kimberlite lithologies and country rock content within the material identified as mineral resources from that predicted; (ii) variations in rates of recovery and breakage; (iii) the greater uncertainty of exploration targets; (iv) developments in world diamond markets; (v) slower increases in diamond valuations than assumed; (vi) risks relating to fluctuations in the Canadian dollar and other currencies relative to the US dollar; (vii) increases in the costs of proposed capital and operating expenditures; (viii) increases in financing costs or adverse changes to the terms of available financing if any; (ix) tax rates or royalties being greater than assumed; (x) results of exploration in areas of potential expansion of resources; (xi) changes in development or mining plans due to changes in other factors or exploration results of Stornoway; (xii) changes in project parameters as plans continue to be refined; (xiii) risks relating to receipt of regulatory approvals or the implementation of the existing Impact and Benefits Agreement with aboriginal communities; (xiv) the effects of competition in the markets in which Stornoway operates; (xv) operational and infrastructure risks; (xvi) technical, environmental, permitting and execution risk relating to the construction by Stornoway of a mining grade road forming part of the Route 167 extension, (xvii) the additional risks described in Stornoway's most recently filed Annual Information Form, annual and interim MD&A, and Stornoway's anticipation of and success in managing the foregoing risks. Stornoway cautions that the foregoing list of factors that may affect future results is not exhaustive.
When relying on our forward-looking statements to make decisions with respect to Stornoway, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. Stornoway does not undertake to update any forward-looking statement, whether written or oral, that may be made from time to time by Stornoway or on our behalf, except as required by law.